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Regulatory Series on Cryptocurrencies: Blockstack obtains approval from US SEC for token offering under RegA+

The blockchain-based start-up, ‘Blockstack’ has bagged the approval from the United States’ financial watchdog, Securities and Exchange Commission (SEC) to run a $28 million public token offering under Regulation A+ program.

Blockstack is most likely to unveil its token offering online on July 11th. While other peers have formerly benefitted from the Regulation A+ funding advantage, thereby, the first time that investors will receive a token, rather than shares in the company.

We are honored to announce that Blockstack PBC’s upcoming token offering has been qualified by the SEC under Regulation A+. This is the first time in U.S. history that a crypto token offering has received SEC qualification. We believe this is a huge step forward for decentralized applications, internet security, and privacy.

Regulation A+ is an initial public offering (IPO) alternative geared towards startups in need of early funding. Regulation A+ funding was launched in 2012 under the “Jumpstart Our Business Startups Act.”

While Regulation A+ has more lenient disclosure obligations than as with an IPO, it has two tiers with hard caps on raised funds, maxing out at $50 million within a 12-month period.

Blockstack founders Muneeb Ali and Ryan Shea reportedly spent 10 months and approximately $2 million to gain approval from the SEC, as per the report by the Wall Street Journal (WSJ) on June 10. 

A couple of other blockchain-based start-ups have conducted token sale under SEC Regulation D program, including Blockstart. Unlike Regulation A+ sales, Regulation D sale doesn’t have to seek for the SEC approval; nevertheless, that is meant only for the qualified investors, namely, the companies having a minimum of $5 million in assets and $1 million in its figures’ cumulative net worth. Blockstart reportedly raised $47 million through Regulation D funding back in 2017, in addition to the $5 million from venture-capital funding.

By Niranjan Patil
  • Market Data
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